Arthur Peabody (William Powell) is undergoing a mid-life crisis as he approaches his 50th birthday. Much of the story is shown in flashback as Peabody tells his skeptical doctor the source of malaise.
Peabody goes on vacation with his wife Polly (Irene Hervey) to a Caribbean resort. While there, he hears singing coming from a distant key (small island) and takes his boat to do a little fishing. To his surprise, he reels in Lenore, a beautiful mermaid played by Ann Blyth.
Although mute, Lenore is mischievous and childlike and more than a little bit alluring – so much so that before long Peabody has taught her to kiss. He hides Lenore by letting her soak in a suds-filled bathtub and then in the resort’s fish pond. But confusion ensues as his wife thinks he has a big fish in their bathtub and later suspects him of infidelity with Cathy Livingston (Andrea King), a vacationing singer.
Things get even more complicated when, after Polly returns home without Peabody, police suspect him of murder. But by the film's conclusion, Peabody and his wife are happily back at home in Boston with only Lenore’s comb left to prove the reality of his adventure.
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